The Milk Chain

The first thing I noticed about Chilewhen I moved here in 2012 was the absence of fresh milk, and I was not the only one. This topic is laboriously moaned about by expatriates new and old, who are confounded not only by the overwhelming presence of long-life milk (a treatment of ultra high processing known as UHT) but also by the general indifference of the Chilean populace. At some point in the last few decades, UHT milk has become irreversibly part of the stereotypical Chilean diet. When I began working on this essay and asking questions, I received countless different answers as to why the fresh milk had been withdrawn. Digging deeper, I found that there was no single reason. Instead, I have found that the relationship between corporate Chile and the national diet to be unavoidably connected. What anthropologists’ label ‘the Second Food Regime’ has resulted in a nation that has industrialized, homogenized and manufactured not only milk but all dairy products to the point whereby small producers are excluded (Friedmann & McMichael 1989: 106). I have attempted here to trace the chain of milk from its initial production on farms to its point of sale in supermarkets until it is bought by the average Chilean consumer.

To begin, let us understand what treatment processes can be used on milk. The International Dairy Federation (Harding 1995: 114) advises that all raw milk be pasteurised in order to minimize “possible health hazards arising from pathogenic microorganisms associated with milk by heat treatment (…) with minimal chemical, physical and organoleptic change to the product.” The reason for this process is because raw milk is an ideal ground for the growth of microorganisms, some of which may be harmful such as Salmonella, Listeria and Tuburculosis (Harding 1995: 115). Pasteurised milk undergoes heating at a certain temperature to destroy pathogenic microorganisms, as well as ones that can spoil the taste, and thus its durability (Harding 1995: 115). Thermoduric bacteria is not affected by this process and needs to be removed via microfiltration, which also increases its shelf time (Harding 1995: 115). Sterilized milk is a further form of processing, most often used in hotter countries, however the “Maillard reaction’ spoils its colour and taste, as well as its vitamin content (Harding 1995: 115). UHT is considered by many to be the ideal treatment: it’s safer than raw milk, has a longer shelf life than pasteurised milk, and tastes better than sterilised milk. Processing plants use a closed system to heat the milk between 135-150C for 1-4 seconds, achieved in a continuous flow rather than by batches (Harding 1995: 116). It is preheated, sterilised, homogenised (the mixing of cream and milk together), cooled and then filled into sterile containers (Harding 1995: 116). With the pros, there are cons, however. All forms of treatment involving heat for periods of time causes a chemical reaction on some scale, and during UHT ‘heat denaturation’ occurs (Harding 1995: 116). This means that the temperature causes the protein to move away from their original chain or globular shape (Milk Facts 2014). “Post-Pasturization Contamination’ (PPT) may also occur between processing and packaging, therefore strict monitoring, testing and sterilising is necessary (Harding 1995: 118). Gram-negative bacteria are very microscopic but can rapidly grow and develop into listeria, however there currently exists no testing that can effectively measure things of their size (Harding 1995: 118). This means that contamination and therefore illness is still possible with UHT milk.

To turn now to the situation in Chile, Marta Jimenez grew up in the 1940’s and remembers regularly consuming fresh (raw) milk purchased by street sellers direct from the animal. However, she remembers the general feeling of annoyance at the time when sellers began mixing it with water (and not always clean) in order to sell more. Meanwhile, Viviana Saavedra admits that she stopped giving her family regular milk in the 1980’s as prices soared. The consumption of milk generally decreased until boxed milk began to be sold everywhere from markets to street stores. The people little noticed this change, however, given that milk was not an important factor in their cooking or in their beverages (tea is always drunk without milk for example).

In the present, a paradox certainly exists. Street markets are still held daily where many families purchase their fruit and vegetables, and on every street in the cities one can find a general store selling everything from one slice of cheese to freshly baked bread. Often, sellers will purchase their items either direct from the manufacturer, or from other vendors to sell on – as is the case for the multitude of stall holders in ‘La Vega’, Santiago’s grand central market. However, supermarkets can be found in every suburb in every area of Chile and are a mega industry, despite the first one opening in 1995 (Wikipedia 2014). Business ChileMagazine reveals that there are more supermarkets per capita in Chile than anywhere else in the Americas, with sales reaching US$10 million a year – although interestingly, only 62% of all food sales come via supermarkets (Dowling 2008). The rise of the supermarket has resulted in a change in the general eating habits. A study by The American Journal of Clinical Nutrition (Albala et al. 2008:1) explains that the Chilean diet changed at a much faster rate than in other developing countries, due to rapid modernization and overall improved living conditions. The study furthers that the ‘nutrition transition’ resulted in a high-energy, nutrient-poor diet consisting of a marked increase in the consumption of sugar-sweetened beverages (Albala et al. 2008: 1). In actual fact, sugar-sweetened beverages are among the top three items most bought today by Chilean families (Albala et al, 2008: 1). Overall, the stable condition of the economy has increased the potential buying power of the populace, in turn attracting the attention of large companies. Of the supermarkets, there are several groups: Cencosud (owns Jumbo, Santa Isabel), Falabella (Tottus) and the SMU Group, which owns Unimarc (Dowling 2008). Walmart Chile purchased D&S in 2009, which runs the leading Lider, Ekono and Bodega Acuenta discount stores (Walmart 2014).

Milk is sourced on farms such as Fundo Cantarrana in the south of Chile which processes some million litres of milk each year (Fundo Cantarrana 2014). It is then bought by either of the two leading distributors of dairy goods: Nestle Chile and Fonterra (New Zealand). Nestle trades directly with some 1, 200 milk producers while also supplying technical assistance and training in order to better their milk products (Nestle 2012). This includes pressure on the Chilean government to change health and safety standards, whose policies enable the fusion of agribusiness input/output, manufacturing/processing firms to enhance corporate capital (Burch & Lawrence 2005: 11). Nestle Chile itself is part of the wider Nestle Group, which in turn has a substantial profit margin: in 2011, the Nestle Group took in some US$90 billion (Nestle 2012). Some of the milk products Nestle Chile then sells on to supermarkets include infant formula, cream, manjar (sweetened milk spread), condensed milk, powdered milk, evaporated milk and ‘light’ options. Similarly, Fonterra operates in Chile through subsidiary companies notably Soprole. Soprole is Fonterra’s longest running offshore investment (twenty years) and in 2008. Fonterra increased their shareholding to 99.4 percent in order to “further develop Chile as source of fresh dairy” (Fonterra 2014). The result is that by placing themselves in between product and consumer, and enforcing specific requirements, Fonterra and Nestle share the title of being monopsonistic (Friedberg 1995: 20). Furthermore, as the market for milk grows more and more concentrated, farmers are forced to sell to a limited number of companies (Burch & Lawrence 2005: 1). This relationship thus excludes other (specifically smaller) producers who cannot compete (Friedmann & McMichael 1989: 106).

The question remains: why no fresh milk? According to some, the reason is due to the health scare of the 1970’s, when cheap milk powder was imported from Europe that was contaminated. Mistrust of milk (and a fear of the government resulting in ‘turning a blind eye’) has contributed to the rise of the UHT products. Others, such as a spokesperson for Nestle Chile, explained that it is because many people in Chile are without refrigerators. Flaherty Wines explains it thus: “The use of this process [UHT] is ubiquitous in the Chilean dairy industry because the chain of refrigeration is not reliable. The large dairies generally purchase milk from small independent producers, so the milk may not be properly refrigerated before it reaches the main dairy. Not all retail outlets have reliable refrigeration. Finally, not all households have a refrigerator” (2010). It is true that the nature of the country’s geography makes transportation of anything challenging. In the north exists the world’s driest desert, the Atacama, while in the south conditions are freezing and even inhospitable, such as in Patagonia. Furthermore, the extreme south of Chile is broken up by the sea making transportation even more difficult.

However, it is evident that Chile’s predilection for manufactured goods has meant that this is an extremely lucrative business. Within the realm of processed milk exists opportunity for expansion. Demand is steadily rising for fat-free and low-calorie options, which is being readily provided by the manufacturers. In fact, Euromonitor International has labelled this as the leading area for investment in Chile (2014). Proof of this is evident by the large-scale injection of funds by companies. For example, in 2012 more than US$140 million was poured into a new Nestle factory in Osorno that would “produce a range of milk products and ingredients with added nutritional value for domestic consumption and for export to the United States, Central America, the Middle East and Asia” (Nestle 2012). This factory can manufacture some 30, 000 tonnes of milk powder and is considered one of the most technologically advanced plants in the world (Nestle 2012). Nestle Chief Executive Officer Paul Bulcke explains that Nestle continually invests in Chile due to their increasing confidence in the Chilean market, with the desire to create products that can be used at every stage of their lives” (Nestle 2012).

The power held by this sector is known as ‘financialisation’, whereby “private capital markets have become a major source of influence and control over the (…) food system” (Burch & Lawrence 2009: 268). The general fear of mercantilism – of a static market – prompts the drive for increasing profitability (Mintz 1995: 162). For this reason, businesses are looking to expand their opportunities more and more. For example, Claudio Hohman of Cencosud admits that “We’re developing different formats to adapt better to the needs of different market segments,” something which could be beneficial if companies wanted to expand (Dowling 2008). Professor Claudio Pizarro of the University of Chile explains that “There’s a window during which no one is looking hard at Latin America… there are huge opportunities for Chilean firms in Peru, Colombia and Brazil.” (Dowling 2008). Peru is looking especially promising given that it has lower supermarket penetration. UHT milk, with its easy transportability and long shelf life, would suit not only exportation but also the variety of conditions found in other countries. This striving for constant growth is evident by the 2012 Market Indicator Report issued by the Government of Canada, which reveals “Latin America’s vigorous agriculture and manufacturing sectors were expected to boost the economy, starting in 2011, helping to drive rising levels of disposable income and increasing retail sales. This could encourage the mid-market consumer base to recover its confidence and its taste for luxury” (2012). This same report postulates that the future will see the hypermarkets looking to widen their reach to lower-income customers, most notably in second tier cities with populations of 50, 000 people and lower (2012).

UHT processed products are stringently marketed as having added health benefits, despite mounting evidence otherwise. For example, the Centre for Disease Control and Prevention admits that outbreaks of illnesses have been connected with pasteurised milk, which through being treated also has lower nutrients and even missing enzymes (FDC 2014). The effect of these lost enzymes is not yet known, however the FDC maintains that the regular diet in countries such as the United States makes up for what is lacking in the pasteurised milk (2014). However, given that the United States is ranked as the sickest nation in the developed world by a report by the Institute of Medicine this raises some questions (Woolfe & Laudon 2013). In Chile, the World Health Organization explains that rapid nutritional transitions has resulted in a stark change of the nation’s general health (Bambs et al. 2008). It furthers that dietary change has lead to a 32.7% increase in obesity between the years 1960-2000, with approximately 205, 000 morbidly obese in 2003 (Bambs et al. 2008). The “progressive industrialization (…) associated with changes in lifestyle towards unhealthy dietary (…) patterns” has lead to a marked increase in health problems such as hypertension and diabetes (Bambs et al. 2008). It is for this reason that value-added products (such as ‘fat-free’) are growing in demand. However, many of these products contain sugar. An experiment conducted in Chile by the American Journal of Clinical Nutrition found that, in order to increase the health of children by getting them to drink milk, only flavoured milk would be drunk (Albala et al. 2008). This sugar-laden beverage resulted in no improvement whatsoever to their health at the end of the experiment (Albala et al. 2008). It is evident, then, that the Outside Meaning lies here with the manufacturing giants such as Nestle, “whose reach and power transcend both individuals and local communities”, at the risk of the nation’s general health (Mintz 1995: 6).

To a business, long-life milk offers easier transportability and easier storage, particularly if they are to be exported worldwide and across varying conditions. Entire aisles in supermarkets can be filled with numerous types of milk that can sit for months. Customers can safely buy and store cartons, stockpiling them in case of a natural disaster, such as the 2010 earthquake which saw entire suburbs become inaccessible. Most tellingly, a nation of individuals traumatised after the years of Pinochet can consume their milk without any fears that may lead them back to their government. However, it also means that Chile is entirely dependent upon the seedy world of corporations and capitalist gain. The result is a rapidly changing diet with varying health disadvantages. Children are growing up in a nation of the increasingly obese while becoming addicted to the very ingredients that make them that way. UHT milk, while perhaps not as at fault as aspartame laden Coca Cola, can be viewed as a symbol of this relationship. The reality this symbol denotes is that food is consumed not as a means to satisfy the hunger and needs of the many, but as a tool to make profits for the few.

Burch, David, and Geoffrey Lawrence, 2005. Supermarket Own Brands, Supply Chains and the Transformation of the Agri-Food System. International Journal of Sociology of Food and Agriculture, 13 (1): 1-18.

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Kiwi in Santiago living life to the full with two guaguas in tow. I work as a writer and editor, and I love writing, trying new foods, exploring new places, and photography. I can be contacted at: helen@queridarecoleta.com

3 comments on “The Milk Chain”

Fantastic piece- well researched and thought provoking. I work in global supply chain transparency, and grew up on an organic farm in rural Pennsylvania (USA), so when I moved to Chile I was shocked by the industrialization of the food system here, even in smaller towns. My experience in Mexico, Venezuela and Costa Rica had positioned me to expect much more local, fresh food and ingredients. However here in Chile I have found this to be the exception, rather than the norm. The monopolistic system is also so apparent in other foods as well. Personally, I don’t consume much cow milk as I prefer almond milk or coconut milk- ideally organic, so I hadn’t even noticed the lack of fresh milk here (although I was baffled by the shelves upon shelves of unrefrigerated boxed milk). My health was definitely affected when I first moved down here and had such a shift in my diet. Now that we have a place and are not moving around as much, I’m able to cook and bake most of what we eat, so we eat much less of the processed food that heavily dominates the chilean diet. Thanks for this post- really well done

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Kiwi in Santiago living life to the full with two guaguas in tow. I work as a writer and editor, and I love writing, trying new foods, exploring new places, and photography. I can be contacted at: helen@queridarecoleta.com